Pandora Goes After Artist Royalties In Big Risk

[…]But all of Pandora’s lobbying in support for the bill has antagonized musicians, and lawmakers. If it’s not careful, industry insiders said, Pandora could end up jeopardizing their business.

“Pandora has to be applauded for doing such great work to grow the webcasting marketplace,” said Casey Rae, deputy director of the Future of Music Coalition. “Over the years it’s been pretty clear there’s been major benefits to musicians. … When you are looking at IRFA and the potential effects — the sheen starts to come off a bit.”

The bill has attracted a We-Are-The-World collection of foes, with musicians, unions and industry executives joining forces. More than 100 artists and musicians across all major genres — including big-name stars like Katy Perry, Rihanna and Cee Lo Green — signed an open letter in Billboard magazine in November opposing Pandora and the Internet Radio Fairness Act. The NAACP has also attacked the bill. Pandora’s push seems to have stripped the company of a lot of the goodwill it had built within the industry and put the spotlight on its balance sheets. Musicians argue that Pandora already pays them a pittance.

“When you do the math, it’s horrifying for an artist,” Eric Hilton, who runs ESL Music and is one half of the band Thievery Corporation, told The Huffington Post in an email.

Laura Ballance, co-founder of one of the most successful indie labels, Merge Records, whose roster includes bands such as Arcade Fire, the Magnetic Fields and Spoon, said she isn’t happy with Pandora’s current rate either. “It should be higher,” she told HuffPost. “It doesn’t make me feel badly for [Pandora] at all that they should be paying out half of their revenue or more to artists — that is entirely how their revenue is generated.” […]